Disclaimer of onerous tenancy upheld where liquidation no longer needed the premises and eviction decree did not block relief.

A tenanted premises in liquidation was treated as onerous property because it was no longer being used for the company's business and there was no material showing that continued occupation was necessary for beneficial winding up. The court applied the disclaimer mechanism under the Companies Act as a remedy intended to relieve the company of burdensome or unproductive property, including property carrying onerous obligations. It held that an eviction decree did not bar a disclaimer application, since the Companies Act remedy and decree-based execution were independent. Allegations of collusion or fraud were unsupported. The application for disclaimer was maintainable and the Official Liquidator was directed to disclaim the premises and deliver possession.

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Issues: Whether the Official Liquidator was bound to disclaim and hand over possession of the tenanted premises as an onerous property not required for the beneficial winding up of the company, despite the landlord's decree for eviction and the availability of execution as a separate remedy.

Analysis: The premises were no longer being used for the company's business, and the Official Liquidator failed to show that continued occupation was necessary for the beneficial winding up. Section 535 of the Companies Act is meant to relieve the company in liquidation of burdensome or unproductive property, including property carrying an onerous obligation to pay money. The existence of an eviction decree did not bar a disclaimer application, because the disclaimer remedy under the Companies Act and the decree-based remedy were independent. The court also found no material to support allegations of collusion or fraud.

Conclusion: The application for disclaimer was maintainable and ought to have been allowed. The Official Liquidator was directed to disclaim the premises and make over possession to the appellant.

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